A little bit on finances

Lately the boat work has been pretty mundane, of the non-blog-worthy type.  I am still in the second section of the cockpit area and engine room and progress is coming along fine.  I have been busy sanding, cleaning, sanding again, them some more cleaning, then a bit more sanding, and so on.  I don't want to update the blog with too much of the boring every-day details, so I will make some posts when I have semi-completeness to the small projects to display.  Right now the most notable projects are glassing in holes in the section, and replacing a bulkhead. Recently I have been reading through old blog posts to edit and re-tag things so I can organize the website a bit better.  Many of the early posts focus on financial issues I faced getting into sailing, boat buying and cruising.  Since those early posts I have come very far as I had purchased a boat and have been neck deep in its restoration.  I figure it is time for an update to those early posts and to give readers an insight into where I stand on affording this cruising dream.  For your reference, I began the blog outlining my financial situation in this post: I's all about the money - pt. 1.  The next few posts discuss how I plan on affording the boat and cruise in posts such as: How I can make money while voyaging,  Cruising Expenses part 1, 2 and 3; and How much boat can I afford?

I spent a lot of time trying to answer the question "Is this possible without being rich?"  What I learned those early days was that cruising is possible no matter your financial situation.  While it may seem like a rich man's dream to most people, you can cruise on a shoestring and still sleep in the same beautiful anchorage as the millionaire on his motor yacht.  While they may be dining on a $15 burger at the marina, you could be eating a delicious lobster you caught and prepared yourself.  Pride, and good times still in tact...and money saved.  You can even go all out punk-rock style like the guys on S/V Pesilence did as displayed in their documentary here.  Dirt cheap, a little poorly executed, but a killer trip nonetheless.

I always run into this Q&A: "How much does it cost to cruise?"  and the answer is always the same "it costs whatever you have."  While this may be true, that little quote leaves a lot of guess work on how to get there.  Hopefully my blog can bridge that gap for people in a similar situation as me.  What is my situation, exactly?

  • I'm young.  Not so much anymore, but when I decided I wanted to persue this dream I was 26 with not much to my name.  Many people finance their dream by selling a house they have been pouring money into for many years.  I don't have that or a lot of other assets so coming up with a load of cash is a lot more work.
  • I'm single. I have only found a handful of young, single guys trying to go out and cruise.  There are a quite a bit of older men who go out single handed and do it on their own, but they generally have a lifetime of work and experience under their belt.  The vast majority of young cruisers are couples who share the load of finances and boat work.  While I have a wonderful girlfriend, this is my gig and I need to make it happen on my own.  Someday I may get married, and hopefully a partnership will be formed for this journey.  But for now I am on my own and need to carry the whole ship.
  • I had to climb out of debt.  Not only did I not have much to my name, but I had negative net worth.  The first step in this whole plan was to get out of debt, and I was successful in getting rid of the "bad" debt in my first year of trying.
  • I'm not rich.  While I have a decent paying job I am by no means raking in a sizable cash flow.
  • I don't have a bag of cash waiting for me.  It is very disheartening to read cruising blogs of young people only to find out when asked how they afford their cruise, the usual answer aside from selling a house is a big hunk of cash from parents.  It usually goes something like this: "We saved and saved and it was really tough, and as for the boat itself...well lets say we owe daddy a lot of thanks!"  That isn't really inspiring, and a little deflating to people like me trying to figure all this out on our own.  Though I credit them for at least being honest if they are candid about it.
  • I have no sailing or boating background.  I had to figure out EVERYTHING from scratch here.  I had no mentor to show me the way, or even quality time riding around on a boat as a kid.  Most people get into this after sailing all their life with family members or friends, but I know there are a ton of people like me who have seen it from the outside wanting to get in.

Since deciding to chase this dream, I devoted myself to living a frugal lifestyle to be able to save and afford this cruise.  Once I got out of college and entered the work world, I did my part as a dedicated consumer and blew all my money and then some (credit cards!) to afford what I thought was a good life.  Only after a bit of enlightenment thanks to some crucial 3rd world surf trips, my view of this lifestyle drastically changed.  I realized what my dream life was, and buying things to be happy was not it.  The need to save for a dream completely changed how I viewed the things I used to spend money on, and my values shifted dramatically.

I soon stopped wasting my hard earned cash on the latest electronics, nights of black-out drinking at bars, eating out all the time, and other needless things I threw money away on. It was difficult at first, particularly as it alienated me from my friends in some ways.  While they were out drinking late into the night at bars, I stayed at home and read books like Nigel Calder's Diesel Engine Manual.  While they were poking fun at each other for getting a new car without this bell or that whistle, I was beginning to learn how to do my own repairs and maintenance on my old beater to save a buck.  While they were ready to spill a few hundred on a fancy restaurant just for fun, I was working on my cooking skills so I can eat well on the cheap.

It all paid off though, as I was able to get rid of a whopping $12,000 in credit card debt in 9 months and began to save aggressively afterwards.  Every last penny I didn't have to spend I stashed away as part cruising/boat fund, part emergency fund.  With such a strong motivating force, it became easier and easier to save.  All I had to do is ask myself "what do you want more, this thing or another month added to your cruise?"  Easy choice for me.

Around this time the world economy started to crash, and the company I worked for in Orlando wasn't immune to its effects.  Lay-offs began sometime late 2008, and new rounds would happen every few months.  I felt somewhat secure at the beginning since my department was still getting work, but I was still uneasy.  The uneasy feeling helped me save even more aggressively and stash away that emergency fund.

In May of 2009, I was in the middle of the boat search and Windsong popped up on the radar.  For reasons discussed throughout this blog, I took the plunge and took her on as my own.  Unfortunately, 3 weeks after buying her I was cut to part-time status at work.  The cut in my income couldn't have come at a worse moment, and perhaps I was stupid for buying the boat in such uncertain times.

I spent the next 6 months working on a part-time status, but keeping my income up for most of that time by cashing in saved vacation.  I was extremely lucky  that Windsong's previous owner let me keep the boat at his dock for free.  If I had to move her into a slip I paid for, I would have been hurting.  I went further into super-saver mode, and became almost annoyingly thrifty.  I was able to pad my emergency fund quite healthily and continued to keep my eye on the sailing dream.  Then on December 30, 2009 I was laid off completely from the company.

Of all the financial advice I have received over the years, I am probably most thankful for the emergency fund rule.  I had about 6-9 months of living expenses saved up so I was not in ruin due to the layoff.  What was terrifying, however, was the prospect of owning the boat during this time and the thought of spending that cash which I hoped to one day use for the cruise.

Lucky enough, the stars aligned for me and I was able to secure a job with a great company in St. Augustine only a few weeks after being laid off.  I've always wanted to live there, and couldn't be happier with how things turned out.  Even better, we agreed that I wouldn't start until that April.  This gave me the time I needed to move Windsong around Florida via sail instead of trucking it like I originally intended.

I have lived here in St. Augustine more than a year now and have been restoring Windsong ever since.  People ask me often how much I have spent on this restoration so far, and the answer is "not much".  It took me nearly this much time just to take the thing apart in a method that would allow me to put it back together one day.  All that required was a few hundred dollars spent on tools and various supplies such as sandpaper.  Other than that most of the money has gone to storing the boat in the yard.

That brings me to a point that I didn't necessary overlook, but underestimated as a big expense: storing your boat.  When I was looking into a boat that would need a lot of work, I researched what it cost to keep a boat on land while working on it.  I was deceived by incredibly low prices such as $3-4 per foot per month, which I later learned was for boats just being stored...not worked on.  If you want to work on your boat most places charge a daily fee that borders on ridiculousness.  Luckily I was able to find a yard that charged a reasonable rate and had good facilities.  I pay close to what I would pay if I had my boat in the water, roughly $12 per foot per month.  With taxes, electricity, and now mast storage the actual cost is about $560 per month.

If you are considering buying a boat that can't be hauled out of the water, be sure to take into account slip, mooring or storage fees because they can be easily overlooked.  While I am able to afford the yard fees, it eats into the amount I can save each month.  I still stash away a good bit of cash each month, but I know all of that will evaporate soon once I start buying things like rigging, windows and restoring the engine.  For now, it is smaller expenses such as epoxy and fiberglass supplies, paint, pricey plywood, etc as I begin the major repairs and restoration projects.

I continue to lead a frugal life and have completely shifted my way of spending (or saving, actually) to be a way of life instead of a temporary jaunt to afford something.  Much like dieting: it only works until you stop.  You have to live it, breathe it, make it your way of doing things.  Living beneath your means is not easy, but with a worthy goal you will find the motivation.  I want nothing more in this world than to be able to do this journey, and with that always in the front of my mind I can easily not buy whatever tempts me.  I am happy that I have learned to live comfortably on a lot less than I used to as I will have to once I set sail regardless.

This is sort of a disjointed post, I know, so I apologize for not really going anywhere with it.  I just wanted to give an update to say that things are going well on the money-front...for now.  We shall see how it goes once I need to drain my savings for the big ticket items, but now that I know how to save I'm not worried about replenishing the bank when I need to.